Morning News: June 18, 2024
Posted by Eddy Elfenbein on June 18th, 2024 at 7:02 am

Biden’s Tough-on-China Stance Threatens Green America Push

Indonesia Can’t Ignore the Cost of Its Battery Metal Boom

Carbon Removal Fund Backed By Meta, Alphabet Agrees Europe Deal

The Deadly Mining Complex Powering the EV Revolution

Waabi Raises $200 Million to Deploy Driverless Trucks by 2025

Electric-Vehicle Startup Fisker Files for Bankruptcy

Coke—and Dozens of Others—Pledged to Quit Russia. They’re Still There

Western Multinationals Fleeing Nigeria Are Being Replaced by Asian and Turkish Firms

India Regulator Plans Tweaks to Address Derivative Trading Risks

EU Finance Chief Says Ditch National Symbols to Boost Capital Market

Central Banks Expect to Snap Up More Gold This Year Amid Dollar Pessimism

Biden’s Stimulus Juiced the Economy, but Its Political Effects Are Muddled

Citi Pitches Money-Moving ‘Crown Jewel’ as Central to Revamp

Goldman Sees US Jobs at Inflection Point, Sticks to Two-Cut Call

BofA Poll Shows Investors Primed to Fuel Stock Rally With Cash

JPMorgan’s Latest Fintech Fight Highlights the Pain of Sellers’ Remorse

Hedge Fund’s Trades With Lenders Point to Return of Crisis-Era Structures

A Korean Secret to Keeping Friendships Strong: Savings Groups

Amazon Union Workers Join Forces With the Teamsters

‘I Live in Hell’: Anti-Growth Fervor Grips US South After Pandemic Boom

TikTok Challenges Congress’s Secrecy on Alleged Security Threat

Apple Scraps Its Buy Now, Pay Later Product. Forget Payments, AI Is the Focus

Best Buy Trains 30,000 to Handle Microsoft’s AI Laptops Launch

Bacon Ice Cream and Nugget Overload Sees Misfiring McDonald’s AI Withdrawn

Boeing’s Bumpy Ride Isn’t Over

Blackstone to Buy Japanese E-Comic Provider

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Morning News: June 17, 2024
Posted by Eddy Elfenbein on June 17th, 2024 at 7:03 am

Berlin Holds Key to Remaining Russia Gas Flows to Europe

China Property Drag Is Getting Worse, Factory Output Disappoints

Facing E.V. Tariffs, China Threatens Pork Imports From Europe

Global Central Banks Recalibrate as the Big Policy Easing of 2024 Fizzles

Paris Loses Crown as Europe’s Biggest Stock Market to London

ECB Pays Attention to Good Functioning of Markets, Lagarde Says, After France Spooks Investors

How the US Mopped Up a Third of Global Capital Flows Since Covid

Latest Inflation Data Provides Potential for ‘Even Greater Upside’ in the Stock Market Rally

Top Wall Street Bear Surrenders to Bull Market and Flips Forecast, Now Seeing the S&P 500 Soaring to 6,000 by Year-End

Hedge Funds’ Secret Weapon to Fight the SEC Lives in Texas

Trump’s Planned Tariffs Would Tax US Households, Economists Warn

Momentum Is Still Drawing Magnificent Mojo

Trailing 97% of Bond Funds, Western’s Flagship Is Losing Cash

Popular Arbitrage Trade Backfires as TSMC Frenzy Grows in US

Google DeepMind Shifts From Research Lab to AI Product Factory

Apple’s Vision for AI Simplicity Highlights Miss by Microsoft

Surgeon General Calls for Warning Labels on Social Media Platforms

Inside DOJ’s Wrenching Decision on Whether to Prosecute Boeing

When Will America Get Its $25,000 Electric Car?

Stellantis, Champion of Home Work, Asks Engineers Back to Office

Toyota Investors Challenge Scion’s Grip at a ‘Critical Juncture’

How A.I. Is Revolutionizing Drug Development

It Will Take More Than US Bargaining Power to Cut Drug Costs

US Olympian Shaun White Launches Snowboarding League

As N.B.A. TV Deal Nears, Warner Bros. Discovery Is on the Outside

Adidas Investigates Allegations of Bribery in China

China’s Lust for Durian Is Creating Fortunes in Southeast Asia

Primo Water, BlueTriton Brands Affiliate to Merge

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Morning News: June 14, 2024
Posted by Eddy Elfenbein on June 14th, 2024 at 7:02 am

Gas Markets Brace for Price Spikes During Turbulent Summer

Global Food Roundup: Farming’s AI Answer and Struggling Startups

Industrial Policy Balances Politics and the Planet

BOJ’s Lack of Detail on Bond Buying Cuts Leaves Yen Vulnerable

Macron Election Call Sends French Markets to Worst Week in Years

US Money-Market Funds Hit All-Time High of $6.12 Trillion

Why the Stock Market Has Risen Even With No Fed Rate Cut

Crypto Titans’ $160 Million War Chest Threatens Senate Democrats

The Case for Investing in Bitcoin or Gold, or Both

Former Bank Bailout Watchdog Is Choice to Lead F.D.I.C.

The Pandemic Felled Dozens of Stellar Credit Ratings. CFOs Want Them Back

Visa, Mastercard $30 Billion Fee Settlement in Peril

Courting C.E.O.s, Trump Says He Intends to Cut Corporate Taxes Again

Does It Pencil?

F.A.A. Investigating How Counterfeit Titanium Got Into Boeing and Airbus Jets

Musk Pay Victory Removes Cloud at Tesla, but Fresh Legal Fight Looms

Tesla Can’t Be All About Elon Musk

Nice EV You Got There—Can You Afford to Insure It?

Stellantis Moves Some EV Production Out of China Due to EU Tariffs

Why Are Shares of Adobe Stock Soaring After Earnings?

Amazon Has Upended the Streaming Ad Market, and Netflix Is Paying the Price

Paramount Will Keep Its Family Discount

Red Lobster Looks to New Wall Street Savior After Prior Woes

Cava Is Worth $33 Million Per Restaurant After Blistering Debut

The N.B.A. Sees Its Future in Africa

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Morning News: June 13, 2024
Posted by Eddy Elfenbein on June 13th, 2024 at 7:06 am

Deadly and Wildly Profitable, Uranium Fever Breaks Out

Chinese Trader’s $20 Million Pile of Russian Copper Goes Missing

G-7 Agree to Tap Frozen Russian Assets for $50B to Ukraine

China’s Once-Mighty Credit Cycle Is a Fading Force on World Markets

Why Biden Is Escalating Trump’s China Tariffs

Taiwan Central Bank Leaves Key Interest Rates Unchanged

Why Bond Markets Are So Spooked by the French Election

Bond Market Splits From Fed Again by Betting on 2024 Rate Cuts

Private Lenders Storm Public Bond Markets at Record-Setting Pace

Treasury Secretary Yellen Says U.S. Debt Load is in ‘Reasonable Place’ If It Remains at this Level

Why Investors Don’t Believe the Fed

Why Big US Banks Are Resisting Bigger ‘Capital Cushions’

Goldman Sachs Aims to Double Lending to Wealthy Private Bank Clients

Trump to Pitch Dimon, Fraser as Verdict Fails to Scare Off CEOs

JPMorgan to Wager on Weight-Loss Craze With $500 Million Fund

Big Tech Wins Again on Double Whammy Day

TikTok, Snap Find It’s Not Easy to Keep Young Kids Off the Apps

Larry Ellison’s Fortune Passes Brin and Ballmer as AI Boosts Oracle

China’s EV Makers Saw Europe Tariffs Coming, and Many Already Have a Plan

Tesla Expects to Raise Model 3 Price In Europe Due to EU Tariffs on EVs From China

Tesla Share Price Is Its Own Referendum on Musk

Tesla Jumps After Musk Says Shareholders Backed Pay Package

Elon Musk Allegations Are a Reminder That Harassment Is About Power

Montana Has More Cows Than People. Why Are Locals Eating Beef From Brazil?

The Rise and Fall of a $600 Million Strip-Mall Tycoon

Disney and DeSantis Reach Agreement, Ending Protracted Fight

HBO Could Use a Hit. Enter the Dragons

Sony Pictures Acquires Alamo Drafthouse in Lifeline to Cinema Chain

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Morning News: June 12, 2024
Posted by Eddy Elfenbein on June 12th, 2024 at 7:04 am

OPEC+ Producers Are Caught Between Diverging Oil Forecasts

The World Will Be Swimming in Excess Oil by End of This Decade, IEA Says

G-7 to Call on China to Stop Helping Russia’s War in Ukraine

EU to Impose Additional Tariffs on EV Imports From China

Umicore Slashes Guidance After Slower EV Demand Hits Battery-Materials Business

Uniper Wins $14 Billion Arbitration Ruling Against Gazprom

Far Right May Irk EU in €500 Billion Investment Push, Scope Says

FedEx to Lay Off up to 2,000 Employees in Europe Amid Cost-Cutting Efforts

U.K. Economy Slows, Underlining Government’s Challenges as Elections Loom

Peso Gets Crushed as Investors Worry Sheinbaum’s Win Was Too Big

Fed Officials Eye Key Inflation Metric Hours Before Rate Decision

Biden Nears Pick for Next F.D.I.C. Chair

JPMorgan Risk Swap Ends Up at a Familiar Place: Rival Banks

US Money Funds Look Past Reform Angst Thanks to High Rates

The Tiny Trades That Brought Down Segantii’s Giant Hedge Fund

GameStop Raises Over $2 Billion After Roaring Kitty Rally

McKinsey Boss’s Next Big Consulting Project: His Own Firm

Asia’s Family Office Frenzy Comes With Plenty of Imposters

Explosive Cases Flow to US Supreme Court from ‘Bold’ Regional Court

I Spent a Day Down TikTok’s Disinformation Rabbit Hole

Paramount Can’t Stay Independent Long After Rebuffing Skydance

Why the Paramount Deal Talks Failed

Losing a Bridge Upends Life in Baltimore (and It May Soon Get Worse)

Buyers Snap Up Aging and Empty Office Buildings for Deep Discounts

More Than 75% of US Hotels Remain Short-Staffed

The World’s Most Online Male Gymnast Prepares for the Paris Olympics

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CWS Market Review – June 11, 2024
Posted by Eddy Elfenbein on June 11th, 2024 at 6:17 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

The S&P 500 Makes Another All-Time High

The stock market closed today at yet another all-time high. This market has been impressively resilient, especially the growth side. Since May 1, the S&P 500 has gained 7.1%.

I noticed that shares of Apple popped to a new high today on news that it’s unveiling AI software. These days, all you have to do is mention AI and your stock may double. I’m exaggerating, but not by much.

Not that long ago, the market was looking a lot more fragile. On May 31, the index came close to touching its 50-day moving average but instead of falling through, the market bounced four days in a row.

Wall Street was helped on Friday by a surprisingly strong jobs report for May. The Labor Department said that the U.S. economy added 272,000 net new jobs last month. That was ahead of Wall Street’s forecast for a gain of 190,000 jobs. For context, the economy added 165,000 new jobs in April.

So is the economy soaring? Well, not exactly. The jobs report was a mix of good and bad news. The unemployment rate rose to 4.0%. That’s the first time it’s reached that level since January 2022. The labor force participation rate fell 0.2% to 62.5%. The broader U-6 rate stayed the same at 7.4%. In December, the U-6 rate was at 6.5%.

You can see that a lot of the job gains are really us getting back to the jobs trend that existed before Covid.

There are other areas of concern. For example, the separate household survey showed that the number of full-time jobs fell by 625,000 while part-time jobs rose by 286,000.

Here are some details:

Job gains were concentrated in health care, government, and leisure and hospitality, consistent with recent trends. The three sectors respectively added 68,000, 43,000 and 42,000 positions. The three sectors accounted for more than half the gains.

Other significant growth areas came in professional, scientific and technical services (32,000), social assistance (15,000), and retail (13,000).

One important bright spot is that average hourly earnings increased by 0.4% last month. That’s good to see. Wall Street had been expecting an increase of 0.3%. Over the last year, average hourly earnings are up by 4.1%. Unfortunately, a lot of that increase has been eaten up by inflation.

Why Is the Fed Talking About Cutting Rates?

With the jobs market mostly healthy and the stock market at new highs, why exactly are we talking about the Federal Reserve cutting interest rates? That’s a good question, and the answer is not entirely clear.

The latest futures prices indicate that Wall Street is about evenly divided on the need for an interest rate cut by September. Not that long ago, a broad consensus assumed that we’d be slashing rates by now. I wouldn’t be surprised to see growing dissention within the Fed.

Inflation is still above the Fed’s target, but it’s a lot better than it was a year ago. The Fed hasn’t changed rates in nearly a year, and it’s clear that higher rates have had a major impact on the economy.

We’ll get more important info. tomorrow morning when the June CPI report comes out. Wall Street expects the CPI to have increased by 0.1% last month and the core rate to have increased by 0.3%. Over the last year, Wall Street thinks the CPI rose by 3.4% and the core rate increased by 3.5%.

The Federal Reserve started its two-day meeting today. The policy statement will be released tomorrow afternoon. Don’t expect to see any change to interest rates. The Fed will also update its economic projections for the next few years (the dot plot).

I’ll be curious to see what the Fed expects for GDP growth for this year. The Q1 GDP report wasn’t so hot, but I don’t know if this was a hiccup or the start of a trend.

The last time the Fed updated its economic projections, the members saw the need for three rate cuts this year. Spoiler alert: That ain’t gonna last. My guess is that the Fed cut that back to two rate cuts. It seems that getting inflation from 9% to 3% was surprisingly easy but getting it from 3% to 2% is surprisingly difficult. At some point, it might be easiest for the Fed to declare victory and walk away from its 2% inflation target.

I’ve discussed my concern that the current market rally is too heavily tilted towards growth stocks. That’s not getting any better. If anything, the spread is getting worse. Typically, value stocks do better as interest rates fall, so the recent surge in growth stocks is closely tied to a more reluctant Federal Reserve.

Value stocks have become widely unloved. I counted 71 stocks within the S&P 500 that have a dividend yield of more than 4%, and that’s not all utilities and REITs.

Stock Focus: Hawkins Inc.

As you probably know, I love finding great stocks off the beaten path, especially ones that have done well and are ignored by Wall Street.

One such company is Hawkins Inc. (HWKN) of Roseville, Minnesota. The company describes itself as a “leading specialty chemical and ingredients” company.

Snoresville, right? No, Hawkins isn’t the most exciting business, but it’s an important one, and it’s something people need. Hawkins “formulates, distributes, blends, and manufactures products for its Industrial, Water Treatment, and Health & Nutrition customers.”

Hawkins has been around since 1938. The company has 60 facilities across 27 states. Hawkins has about 950 employees and last year, it generated revenue of $919 million.

Now for the best part. Since 2000, Hawkins is up by more than 36-fold. The S&P 500 looks like a flat line in comparison. Hawkins has also raised its dividend fairly consistently for nearly 40 years.

You might think that with a track record like that, and a with a market value of nearly $2 billion, Hawkins would grab Wall Street’s attention. That’s not the case. Hawkins is followed by just two analysts. Maybe they should change their name to AI Hawkins?

That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: June 11, 2024
Posted by Eddy Elfenbein on June 11th, 2024 at 7:07 am

Nigeria Confronts Its Worst Economic Crisis in a Generation

OPEC Keeps Robust Oil-Demand Outlook After Output Policy Move

Philippines Sees Nuclear as Long-Term Replacement for LNG

Wall Street Ties to Amazon Depletion Mapped Out in New Report

ECB’s Lane Says Euro Moves Haven’t Impacted Inflation

Fed Is in No Rush to Cut Rates as Economy Holds Up

Fed’s Higher-for-Longer Stance Hits Firms That Expected Rate Cut

For the Descent, Follow the Dots

As Supreme Court Decisions Loom, a Legal Assault Is Weakening SEC’s Power

Alexander Hamilton’s Bank Is Getting a New Name: BNY

Hedge Funds Pile Into Copycat Quant Trades They Once Derided

Segantii Insider Case Hinges on a Market-Moving Block Trade

Food Companies Hope You Won’t Notice Shortages Are Raising Prices

Foraging on Public Lands Is Becoming More Limited

First Came ‘Spam.’ Now, With A.I., We’ve Got ‘Slop’

Apple’s ‘AI for the Rest of Us’ Plan Gets Lukewarm Reaction

Can Apple Rescue the Vision Pro?

Nvidia Stock Slips. Why It Didn’t Benefit From an Apple Boost

Tether to Invest More Than $1 Billion in Deals Over Next Year

PR Founder-Turned-VC Investor Bucher Raises $150 Million for New Fund

Budget Computer Maker Raspberry Pi Soars in Opening Trade

French IT Firm Atos Accepts Rescue Bid From Onepoint Consortium

GM Authorizes $6 Billion Buyback as It Books Better EV Profits

Ikea Lost $5,000 When Each Worker Quit. So It Began Paying More

‘Anti-Woke’ Shareholders Are Going After Corporate Boards

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Morning News: June 10, 2024
Posted by Eddy Elfenbein on June 10th, 2024 at 7:05 am

There’s More to Asia-Middle East Trade Than Oil

Noble Corp to Buy Diamond Offshore for About $1.6 Billion

Green Wipeout Means Fights Ahead to Keep Europe’s Climate Goals

Keeping Sanctioned Russian Timber Out of the EU Is Tricky. This Nonprofit Has a Solution

Copper Miners Gun for Share of Windfall in Chile

Ukraine’s Vision of Robot Assassins Shows Need for Binding AI Rules

The Housing Market Crisis Shows That the Tool The Fed Is Using To Lower Inflation Is Doing The Exact Opposite

Homeownership Costs in the US Jumped 26% Since Pandemic Began

Week Ahead for FX, Bonds: Spotlight on U.S. Federal Reserve, Bank of Japan

How the US is Daring the World to Find a Dollar Alternative

Americans Really, Really Hate Inflation—and That’s a Big Problem for the Fed

New York Fed Is Losing Talent and ‘Street Cred’ Under John Williams

Wall Street Backers See Breakthrough Moment for Carbon Offsets

As Banking Moves Online, Branch Design Takes Cues From Starbucks

Julius Baer Targets Rich Indians in Dubai With UBS, JPMorgan Hires

Don’t Say ‘Elite’: Corporate Firms’ New Pitch Is Meritocracy

‘No Clear Deception:’ Chamath Palihapitiya Doesn’t Think Roaring Kitty Rigged GameStop Stock As SEC Rules Don’t Address Influencers’ ‘Outsized Role’

The Shortcut That Allows Risky Startups to Raise Billions From Rookie Investors

Unicorns Ruled for a Decade. Tech Needs a New Beast

Apple’s $471 Billion Rally Hinges on Whether AI Event Delivers

Can Apple Think Different on A.I.?

Tesla’s Investor Vote on Elon Musk’s Pay Package Is About More Than His Money

Airlines Keep Trying to Cut Out the Middleman. Here’s Why It Backfires

A Big Decision for Boeing’s Next C.E.O.: Is It Time for a New Plane?

Volvo Car Recalls Its New Electric EX30 Car After Finding Software Glitch

Scammers Aren’t Just Selling Fake Gucci. They’re Impersonating Small Merchants

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Morning News: June 7, 2024
Posted by Eddy Elfenbein on June 7th, 2024 at 7:01 am

Europe’s Fertilizer Producers Sound Alarm Over Big Imports From Russia

German Trade Surplus Narrows

Putin’s Wartime Central Banker Tells Him What He Doesn’t Want to Hear

Russia’s Gain Is Turning Out to Be China’s Pain

China’s Exports Surge as Trade Tensions Near Boiling Point

China Conducts Large-Scale Audit Reviews on Biggest Mutual Funds

India’s Modi, Humbled by Voters, Faces Potent Economic Struggles

India Central Bank Keeps Rate Unchanged After Election Raises Fiscal Policy Uncertainty

US Jobs Report Is Set to Confirm a Steady Slowdown Underway

Markets Poised to Take a Jobs Slowdown in Stride

Real Estate Investors Are Wiped Out in Bets Fueled by Wall Street Loans

GameStop Whipsaws on Share Sale Plan Hours Ahead of Gill Stream

BlueBay Looks to Buy Credit Suisse Debt as EM Loan Bet Pays Off

Hedge Funds Andurand and Rokos Took Big Copper Bets Before Spike

Japan Banks to Begin Divesting Their Strategic Toyota Shareholdings

Trump Tax Cut Renewal Is Winning Wall Street, But Could Cost $4.6 Trillion

Donald Trump’s Budding Bromance with Tech Moguls

Is There Room for Common Ground on Congestion Pricing?

Banks Say Growing Reliance on Big Tech for AI Carries New Risks

SoftBank Corp. to Build Large-Scale AI Data Center in Osaka

Saudi Arabia Set to Raise Over $11.2 Billion From Aramco Stock Sale

Legacy Airlines Are Thriving With Ultracheap Fares, Crushing Budget Carriers

Wizz Air Weighs Engine Maker for New Airbus Jets Amid Groundings

The Ads on Your United Airlines In-Flight Screen Are Getting a Lot More Specific

GM Has a Secret to Help Sell Its New EVs. It’s Costco

Food Companies Are Still Paying the Price for Years of Inflation

Big Alcohol’s Monopoly Isn’t Worth Breaking Up

It’s a Buyer’s Market for Boats, RVs and Other Pandemic Toys

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Morning News: June 6, 2024
Posted by Eddy Elfenbein on June 6th, 2024 at 7:06 am

Drought Reduces Zambian Corn Harvest to 14-Year Low

Billionaire-Friendly Modi Humbled by Indians Who Make $4 a Day

Trafigura’s Profit Drops 73% as Trading Boom Cycle Fades

Copper’s Spike Isn’t Justified By Fundamentals, Trafigura Says

Bank of Canada Cuts Rates to Become First G-7 Central Bank to Ease Policy

ECB Expected to Announce Interest-Rate Cuts

The Fed Is Getting Left Behind on Cuts. That’s OK

U.S. Government Debt Is A Growing Concern

Americans Have More Investment Income Than Ever Before

Robinhood Doubles Down on Crypto With Deal for Bitstamp

‘Everything Is Not Going to Be OK’ in Private Equity, Apollo’s Co-President Says

Office Building Losses Start to Pile Up, and More Pain Is Expected

US Payroll Gains May Be Overstating Labor Market Strength

AI’s Hidden Workers Are Stuck in Dead-End Jobs

U.S. Clears Way for Antitrust Inquiries of Nvidia, Microsoft and OpenAI

Nvidia’s Rise to $3 Trillion Fuels ‘Jensanity’ in Tech World

Is OpenAI’s Sam Altman the Right Leader for the AI Age?

Sam Altman Was Bending the World to His Will Long Before OpenAI

‘This Is Going to Be Painful’: How a Bold A.I. Device Flopped

NIO’s First-Quarter Loss Widened on Lower EV Sales

Bob Kelley, Who Made the Kelley Blue Book an Authority on Cars, Dies at 96

Why Lululemon’s Stock Is Going Out of Fashion

The NBA’s Superstar Lull Ignites Challengers to Nike’s Reign

Five Below Cuts Outlook on Lower Consumer Base Spending Levels

Remy Martin Sees Tough Year Ahead as U.S. Slowdown Drags On

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